4 Minute From Wheeler To Fadden
Cabinet Submission No. 32-Trade with Japan
I. refer to Cabinet submission No. 32 containing recommendations by
the Minister for Trade and Customs for a relaxation of the present
restrictions on the licensing of imports from Japan to permit the
importation of limited quantities of Japanese consumer goods.
2. On general financial and economic grounds it is desirable that
Australia should be able to obtain from abroad as much as possible
both of equipment and materials for production and of finished
consumable goods, currency conditions permitting. Increased
imports lead to an addition of goods available in the domestic
market without adding to local incomes so that there is a net
drawing off of excess purchasing power.
3. Japan is at present treated as a 'hard' currency country
because of SCAP's right under the existing payments agreement to
convert his sterling balances into dollars when they exceed
Japan's requirements. So far SCAP has not had occasion to use this
right and Japan is at present short of sterling to finance her
trade with the sterling area. The United Kingdom Government is
currently seeking a new sterling payments agreement with SCAP
which would exclude the danger of dollar liability and although
the new agreement has not yet been concluded, the sterling area
currency position is strong enough to allow a more liberal scale
of import licensing.
4. Australia's bilateral balance of payments with Japan has been
very favourable. Trade figures for the first ten months of 1950/51
show a favourable balance of over A36m. in our trade with Japan.
5. From an economic and financial point of view it is recommended
that the proposals of the Minister for Trade and Customs be
supported. The political implications of allowing a restricted
importation of Japanese consumer goods into Australia are of
course not matters on which the Treasury can offer comment.
[AA : A571/158, 46/1431, xv]